A need to prove that natural gas resources in British Columbia’s northeast can support potential liquefied natural gas projects on the West Coast is helping spur a rebound in drilling-related activity in the province’s gas patch.

After dropping to a 10-year low in 2012, applications to drill wells are up and commission authorizations for wells have increased 53 per cent over the first six months of 2013.

To the end of June, the Oil and Gas Commission had granted authorization for 469 new wells, up from 307 over the same period of 2012.

Not all of those applications have translated directly into drilling. To the end of June, the commission counted 250 new wells drilled compared with 265 over the same period a year ago.

But industry analyst Gordon Currie estimates much of any increase can be attributed to LNG proponents trying to establish the resources for their prospective projects, because even with a recent bump in North American natural gas prices, the economics for gas drilling are still difficult.

“I guess they want to establish for themselves and for future customers that there is enough gas there to back up a six-million-tonne per annum (of LNG production) project,” said Currie, a senior oil-and-gas sector analyst for the firm Salman Partners.

A large number of the authorizations have been granted to energy giants Shell Canada and Progress Energy Canada Ltd. in the Montney formation west of Dawson Creek, one of the rich shale-gas regions expected to support B.C.’s nascent liquefied natural gas export industry.

Both Shell and Progress, which is now a subsidiary of the Malaysian state-owned energy firm Petronas, are partners in separate, multi-billion-dollar LNG proposals for B.C.’s coast.

Currie said at his last count, Progress Energy has about 25 drilling rigs active in B.C. and “they’re going hell bent for developing those properties they have for their future LNG project.”

Shell is a partner, along with Korea Gas Corp., Mitsubishi Corp. and PetroChina, in LNG Canada, a proposed plant that will be capable of liquefying and exporting 12 million tonnes per year of natural gas.

Shell spokesman Stephen Doolan said Western Canada’s sedimentary basin is expected to supply the LNG Canada plant, but couldn’t speak to the question of whether its 2013 activity in the Montney is related to the project.

“Historically, northeast B.C. has been an important part of our business in Canada and North America and will continue to be so,” Doolan said.

However, Geoff Morrison, the manager of B.C. operations for the Canadian Association of Petroleum Producers, cautioned against drawing a direct link between drilling activity in 2013 and potential LNG plants that may be online sometime in 2017 or later.

Morrison noted that when shale-gas wells, which use hydraulic fracturing techniques, cost $8 million to $20 million to drill, energy companies need to earn enough from gas sales to justify drilling them.

He said it is likely producers are responding more to a recent rebound in gas prices that have seen values edge up over $3 per unit compared with $2.50 a year ago than they are to the need to prove reserves.

He added that the Montney is particularly appealing because its formations are richer in natural gas liquids — hydrocarbons such as propane, butane and pentane — that are separated out from dry gas and have their own markets and make wells more profitable.

Morrison said companies to need to show enough reserves for LNG proposals, but there is much less exploration drilling for establishing shale gas reserves than for conventional reserves.

“It’s an economic calculation,” Morrison said. “When do you drill the well that’s supporting an LNG plant that will be built two or three years from now? You’re probably not drilling that well this year, I’d argue.”

However, Currie said natural gas prices are still too low and shale-gas producers in the U.S. are expanding production too much to justify new production in B.C.’s northeast.

“I don’t know why you’d drill for it unless you were drilling to prove up resources,” he said.